Trump Tax Plan, Cuts and Changes in 2017, 2018 and Beyond

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[Update Feb 2017] Following a meeting with business leaders President Trump announced that a major release on details behind his tax reform package is on tap for the coming weeks. Details will be provided covering “comprehensive tax reform both the business side of the tax ledger as well as the individual rates,” according to follow up comments from press secretary Sean Spicer. No exact date was given for release of this information, but Trump indicated it would be “over the next two or three weeks [end of February]…and would be phenomenal in terms of tax….with significant tax reductions.” He went on to say that the tax reforms he is proposing (see below) will, “… lower the overall tax burden on American businesses big-league“.


I encourage you to share this article and connect via Facebook or Twitter to get the latest updates and news related to Trump’s tax reform proposals.

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With Donald Trump now the 45th President and the Republicans controlling the House and Senate, we are likely to see a number of tax changes in the year ahead if his campaign plans and promises hold. As with everything else, the Trump administration was light on the details but here is what we do know about the proposed Trump tax plan:

  • Federal tax rates and brackets would be simplified down to three versus the seven today. Those with a taxable income between $0 and $37,500 ($0 to $75,000 for married filers) would be subject to a 12% tax rate, taxable income between $37,500-$112,500 (or $75,000-$225,000 for married filers) would be subject to a 25% rate. While those with taxable income above $112,500 ($225,000+ for married filers) would be subject to a 33% federal tax rate.
  • The standard deduction would more than double to $15,000 for single filers to $30,000 for married couples filing jointly while ending personal exemptions. This increase along with the lower tax brackets would see federal taxes due go down for most Americans.
  • Itemized deductions would be capped at $100,000 for single filers and $200,000 for married couples filing jointly. This is down from current levels and in line with Trump’s goal to simplify tax rules and prevent the rich from taking legally gray deductions.
  • To promote small business investment Trump would eliminate the 3.8 percent tax on net investment income on people with incomes (MAGI) of over $200,000 for single filers and $250,000 for married filers. The tax rates on long-term capital gains would be kept at the current 0%, 15% and 20%. In a hit to hedge fund managers, there is also a proposal to taxing income from carried interest at ordinary income tax rates.
  • A full repeal the alternative minimum tax (AMT) and the estate tax. Under current law, estates valued at more than $5.45 million are subject to a 40% tax rate. Cutting the AMT and estate tax would stand to benefit higher income earners the most.
  • The individual mandate (or Obamacare tax as some call it) would also be repealed in 2017, meaning that penalties would not result if people don’y have health insurance.
  • The corporate/business tax rate will be lowered from 35% to 15% to become more competitive globally. To encourage the repatriation of earnings being kept by American multinationals in overseas banks, subject to lower local corporate tax rates in those countries, the Trump administration will only subject these funds to a lower 10% corporate repatriation tax rate.

While they may get passed by Congress, a lot of Trump’s tax changes won’t go into effect until 2018, since 2017 tax rates and brackets have already been established. Further, the House Republicans (under Paul Ryan) also have an alternative tax plan which while also looking to cut corporate and personal taxes, is not as aggressive as the proposed Trump tax plan.

So in order to get wide scale tax reform passed across all branches of government there will need to be some sort of compromise tax plan agreement. The Trump administration also hasn’t laid out any real plan to pay for these tax cuts and proposed no net spending reductions to offset his tax plan’s $7 trillion cost.


Under a Trump tax plan middle class tax payers would likely see modest tax savings, while those in highest income ranges would actually see the most in savings given the lowering of the highest marginal tax rate, increase in standard deduction and repeal of the AMT. Under proposed Clinton plans middle income earners saw more tax savings while higher income earners were taxed more heavily.

{ 11 comments… read them below or add one }

Amy Redmond February 21

I think as a working class person myself, I personally am sick and tired of paying for lowlife s and deadbeat and lazy people that’s able to work, I’m also sick of thsee young kids and adults taking advantage of the government but really the government is giving them everything and not the working class people, I think we should get a stimulus package . We deserve something, I for 1 am sick of going to work everyday dealing with bullshit and idiots but guess what , I have morals and bills to pay for, I’m sick of being taxed every week out of my check and also taxed the hell out of on my income taxes, you have money Mr trump so if you going to do something stand up and be a real man and give us working class people something and also let’s tax people by what their income is , how about that. Thank you
Amy Redmond

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Jeff S January 23

Funny how Trump keeps talking about cutting taxes and simplifying the system. How about he releases his taxes as well to show how much he has profited (or avoided paying taxes) from the current tax system. Definitely need to simplify things, but Trump will just make the system better for the richest based on this plans. And who will pay for all these tax cuts? Just assuming that growth will offset the lower tax revenue is NOT a realistic plan. Its like saying I can keep spending more because I assume I will earn more forever.

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Jacob February 3

Really I make an small 16000 and under his plan only a thousand will be taxed at twelve percent do your research and quit whining about him not releasing his taxes Boohoo nobody gives a crap what about hitlery erasing he Clinton foundation emails that showed she had 20% of her campaign funded buy the Saudi Arabians who mutilate female genitals for even looking at another man and hurl homos off the roof of the highest building yeah she’s the perfect one for the white house I say…Trump!

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jacob2 February 14

jacob, so sorry to hear the twisted, hateful thoughts coming from your mind. trump and hitler are more similar than anyone else in american history. he is the only person that says “only he” can save us, this on top of him having very little knowledge of how things work in government anyway. not sure why you are so angry at hillary. of course she has contributions from people you may not approve of, do you really think all saudis are the same? just look at how divided we are.

Jason February 24

Jacob, You are one ignorant twit. Playing the Clinton card is old as hell. Give it up.

Stanford January 14

Any thoughts given to eliminate tax on social security?

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Mike Stefanik February 14

Join the discussion

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Maria Gomez November 21

With this tax structure he will spend more time remembering his rich friends and associates than the low-earning voters who made him their president.

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Ohiodale December 23

You can’t lower taxes on people who currently pay little to no taxes. My taxes will probably not go down but I am more concerned about jobs creation than lowering my taxes. Earning a higher salary is much more rewarding then sitting around hoping the government gives me a little of my money back. I did not vote for Trump to pay lower taxes. I voted for Trump for job creation, fighting terrorism, reversing the racial divide created by Obama, not being politically correct, immigration, and mostly because he is not a bureaucrat who gets rich off lobbyists and tax payers. Trump’s tax plan is all about creating jobs. He is had major tax increases for hedge fund managers and is taking away deductions on the rich. His new tax brackets will help small business owners who create jobs and innovations. Obviously business people like Trump’s tax plan.

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Skippy November 16

Any talk about when trump takes over. A tax rebate sent out like bush did at first.

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Andy (Author) January 23

He doesn’t talk about a rebate – but there may be some sort of 2017 or 2018 economic stimulus, Specific to taxes, this is what he said in his contract to American pledge (Middle Class Tax Relief and Simplification Act)

“An economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief and lifting the restrictions on American energy. The largest tax reductions are for the middle class. A middle-class family with two children will get a 35% tax cut. The current number of brackets will be reduced from seven to three, and tax forms will likewise be greatly simplified. The business rate will be lowered from 35% to 15%, and the trillions of dollars of American corporate money overseas can now be brought back at a 10% rate”

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